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The eradication of poverty in
South Africa
In its 1997
Human Development Report, the UNDP makes the following observation:
"If poverty is to be reduced, policy makers must avoid 'ruthless'
growth that leads to increasing income inequality. Contrary to some
perceptions, inequality usually hinders growth…Poor countries urgently
need to accelerate economic growth…Something else is needed - mainstreaming
the commitment to eradicate poverty…Poverty eradication must be a core
priority of national economic policy…"
The key categories in this paragraph are economic
growth, poverty reduction and reduction of inequalities in wealth and
income.
The extract brings into sharp focus the fact that these
are interconnected categories.
Economic growth is a necessary condition for the reduction
of poverty and inequality. At the same time, the reduction of poverty
and inequality are necessary conditions for the achievement of high and
sustained rates of economic growth.
The paragraph we have quoted above was not written with
any specific reference to our country. It summarises global human experience
in the fight for a better life for all.
Nevertheless, it is directly relevant to what we ourselves,
as a country and people, must do as we pursue this goal.
We have to achieve high and sustained rates of economic
growth. We have to conduct a sustained and successful offensive against
the widespread and endemic poverty in our country. We must make visible
progress in reducing the socio-economic disparities that continue to scar
and characterise our society.
No reasonable person in our country will disagree with
any of these three propositions. Neither will anybody contest the fact
that they are interconnected and are dependent one on the other.
Earlier this week, the Black Business Council (BBC)
presented to our government its "National Integrated Black Economic
Empowerment Strategy", (the Strategy).
The government committed itself to respond to the BBC
after spending the next four weeks studying the report. Accordingly, at
this stage we cannot comment specifically on any of the observations and
proposals contained in the Strategy.
However, there are various important matters of principle contained within
the report on which we should comment, however briefly.
The first of these is that the Strategy contains many
important proposals that should be studied and assessed by as many of
our people as possible.
The prevalent view is that Black Economic Empowerment
(BEE) is about the emergence of a few successful, and therefore rich,
black business people.
Accordingly, many see it as a mere side show to our
continuing struggle for a prosperous, non-racial and non-sexist South
Africa.
Indeed, to express their opposition to black economic
empowerment, some of the opposition parties argue that it is nothing more
than a strategy by an ANC-led government to enrich a select few of its
cronies, (with kickbacks to the politicians), while leaving the masses
of our people to suffer in poverty.
The Strategy gives the lie to the view that BEE is a
matter of concern only to a few black people who are the only ones destined
to enjoy the fruits of our liberation.
Among others, the Strategy contains two important observations
that follow below.
The first of these states that "The report presents
an opportunity for South Africa to break the cycle of underdevelopment
and continued marginalisation of the majority of people within the mainstream
economy, thereby launching the country onto a course of sustained, even
spectacular, rates of economic growth."
The second observes that "…South Africa's economic
growth performance remains disappointing. Continued high levels of unemployment
and ever-increasing poverty threaten to undermine the stability of our
new democracy. The country still has one of the most unequal distributions
of income in the world. This is a reflection of the extremely low levels
of black participation in the economy. The report concludes that the reason
for this is that the country has not yet overcome the Apartheid crisis…Racism
remains ingrained across all sectors of South African society."
These comments, especially the sentence immediately
above, point to the challenge we all face as South Africans.
Because of the apartheid legacy, the conclusions are
inescapable that:
- the struggle for economic growth is also a struggle
for non-racism and non-sexism;
- the struggle to eradicate poverty is also a struggle
for non-racism and non-sexism; and,
- the struggle for an egalitarian society is also a
struggle for non-racism and non-sexism.
From this, and consistent with the observations
made by the UNDP, we must necessarily draw the same conclusion arrived
at by the BBC.
This is that the struggle for black economic empowerment,
contrary to its being the exclusive and self-serving concern of a black
elite, is a struggle for the achievement of the integrated objectives
of economic growth, poverty eradication and the building of an egalitarian
society.
It must therefore address such matters as overcoming
the scourge of unemployment and poverty; ending the race and gender imbalances
among the working people at the work place; achieving all-round rural
development; effecting urban renewal; implementing a successful and appropriate
human development strategy; modernising our economy; and, entrenching
the democratic order.
Clearly, therefore, black economic empowerment is not
merely about the enrichment of a few. As the Strategy states, it has to
be "an integrated and coherent socio-economic process."
As part of this socio-economic process, we must aim
"at redressing the imbalances of the past by seeking to substantially
and equitably transfer and confer the ownership, management and control
of South Africa's financial and economic resources to the majority of
its citizens", as the Strategy puts it.
A proper reading of the report will show that in stating
this aim, the BBC is not arguing that we should adopt a policy of reverse
apartheid, according to which our white compatriots should become "have-nots"
and the black South Africans "the haves".
What the Strategy seeks is an equitable order with regard
to questions of ownership, management and control of our country's productive
resources.
Again, I do not believe that any but die-hard racists
would object to this objective, which is both contained in our national
constitution and is a necessary condition for peace and stability in our
country.
However, the problem our country faces lies hidden in
a sentence contained in the Strategy, which we quoted above - "racism
remains ingrained across all sectors of South African society."
These days, it is as easy to get South Africans to express their abhorrence
of racism and racial discrimination as it is difficult to find any South
African who would confess to having been a supporter of apartheid.
Similarly, as we have said, no reasonable South African
will contest that we face a national challenge to strive for economic
growth and the eradication of poverty and inequality.
Thus we could reach the conclusion that we have obtained
national consensus about the importance of realising the objectives of
black economic empowerment, as explained earlier in this Letter.
The fact of the matter, however, is that it is when
we proceed from theory to practice that our problems start, and we discover
that no such national consensus exists.
Then we come to understand the truth and the burdensome
weight of the statement made in the Strategy, that "racism remains
ingrained across all sectors of South African society."
Put simply, we then find that, in fact and at best,
many among those who belong among "the haves", think that the
challenge of achieving black economic empowerment has nothing to do with
them.
They think that it is not their business and therefore
do nothing either to promote or to resist it.
Others, among these "haves", consider black
economic empowerment to be inimical to their interests and therefore something
to be defeated through both passive and active resistance.
Accordingly, these consider it to be their business
to use all resources available to them to fight against it.
With regard to both cases, it is clear that we are faced
with a continuing challenge to convince all our people that whatever the
privileged position that some in our country might enjoy as a result of
apartheid, it is in their direct interest that they actively support the
integrated objectives of economic growth, poverty eradication and equality.
Accordingly, we must convince them that, objectively,
it is in their material interest that South Africa is transformed into
a prosperous, non-racial and non-sexist stable democracy.
It is also clear that to achieve these objectives, we
must overcome the persisting reality of the mindset among many of our
citizens, that gives substance to the statement made in the Strategy that
"racism remains ingrained across all sectors of South African society."
If we were to realise all these goals, this would enable
us to meet some of the aims spelt out in the Strategy.
For example, our financial institutions would come to
understand that it is in their interest to facilitate access to capital
by emerging black business, which can neither provide the collateral to
secure their loans, nor afford high interest rates.
Our big corporations would consider it their task to
use their resources to facilitate and support the growth of small and
medium black business.
These and other companies would also see that it is
in the interests both of business and the country that sufficient resources
are committed to human resource development and the eradication of race,
gender and disability discrimination at the work place.
Established business would also understand that it is
in its own interest to address issues of race and gender equity in the
direction and management of the thousands of private companies that determine
the future of our economy and society.
Property owners in our city centres would come to realise
that it helps neither them nor our urban areas to allow these city centres
to become urban slums and headquarters of crime syndicates, merely to
make maximum profit.
However, everyday life in our country tells us that
we are confronted by an uphill struggle.
Only recently, seeking to put more money into his own
pocket, a white farmer exercised his legal rights to frustrate a process
of land restitution that, in the words of the Strategy, would have helped
to ensure "broader and meaningful participation in the economy by
black people in order to achieve sustainable development and prosperity."
Black engineering companies find it increasingly difficult
to get jobs from white companies, being forced to depend on work generated
by the public sector.
Whether intended or not, this helps to frustrate the
objective of achieving the objective of the "broader and meaningful
participation in the economy by black people in order to achieve sustainable
development and prosperity."
Young black law graduates find it very difficult to
find law firms that will enable them to serve articles. This helps to
perpetuate the same result of black exclusion.
Some from among the black community are happy to receive fat fees for
perpetrating the fraud of populating our country with the phenomenon of
black masks and white faces, as rented blacks.
This, too, driven by the morality of hunger, which dictates
the co-operation of the black aspirant bourgeois or petty bourgeois in
the perpetration of the fraud, obstructs the advance towards the "broader
and meaningful participation in the economy by black people in order to
achieve sustainable development and prosperity."
Some in our society have committed themselves to wage
an unrelenting struggle to defeat the Minerals Development Bill.
They do this despite the fact that this Bill seeks to:
make our mining regulatory framework consistent with best global practice;
increase investment and jobs in mining; ensure that mining contributes
to the vigorous growth of our economy; enhance the competitiveness of
this sector; enable black as well as foreign companies to invest in mining;
enable it to contribute to the important goals of the eradication of poverty
and inequality; and ensure that it remains a sunrise industry.
Whether intended or not, if this determined and conscious
opposition succeeds, it will help to frustrate the objective of achieving
the objective of the "broader and meaningful participation in the
economy by black people in order to achieve sustainable development and
prosperity."
The future of our country as a winning nation as well
as the happiness of all our people, both black and white, will be decided
not by those who seek to define for all of us a false national agenda.
The outcome of the effort to achieve these objectives
will be determined, in good measure, by how we respond, as a people, to
the challenges spelt out in "National Integrated Black Economic Empowerment
Strategy" that was presented to our government by the Black Business
Council earlier this week.
As we consider these challenges, taking into account
the objective reality in our country, we must place at the centre of our
strategic thinking what the UNDP said:
- that 'poor countries urgently need to accelerate economic growth';
- that 'contrary to some perceptions, inequality usually hinders growth';
and,
- that 'poverty eradication must be a core priority of national economic
policy'.
In his book, "Development As Freedom",
the Nobel Prize Winner in Economics, Amartya Sen, writes:
"We live in a world of unprecedented opulence…And
yet we also live in a world with remarkable deprivation, destitution and
oppression…Overcoming these problems is a central part of the exercise
of development."
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